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The tax bill and the ACA: What has changed?

December 27, 2017

By Lori Stewart, SPHR®, SHRM-SCP, HCS, Partner, Human Resources Consulting

Although the recently passed Tax Cuts and Jobs Act made one important change to existing Affordable Care Act (ACA) regulations, other provisions of the ACA are still intact. Here are some relevant provisions for applicable large employers (ALEs) in particular to take note of:

  • Although the individual mandate (the requirement for individual citizens to have health insurance) will reduce the penalty to zero, effective with tax years after Dec. 31, 2018, it is still in force through the entirety of the 2018 tax year. That means an individual will be answering the question on 2018 tax forms and be required to pay the individual shared responsibility penalty on their taxes in the Spring of 2019, if the individual did not have ACA minimum essential coverage (MEC) in 2018. Not until Jan. 1, 2019, will the penalty be reduced to zero for the requirement to have ACA MEC.
  • ALEs will still be required to report annually to the Internal Revenue Service (IRS) to show they have offered ACA-compliant and affordable coverage. The IRS will use the reporting to penalize employers with full-time employees who received a premium tax credit through the healthcare.gov marketplace. This Section 6056 (Form 1095C) reporting requirement has not changed, and “good faith” reporting standards are no longer “good enough.” The IRS expects the reporting to be correct and may issue penalties for incorrect and missing forms, in addition to penalties for not offering MEC and/or for not offering affordable, minimum value coverage. There have been no changes to these requirements.
  • Please note: The IRS has changed the 1095C employee delivery deadline from Jan. 31 to March 2. The paper submission and electronic submission dates to the IRS have not changed; those dates are Feb. 28 and April 2 respectively.
  • Taxpayers do not need to wait for forms 1095B or 1095C to file their income tax returns.
  • Individuals and households up through 400% of the poverty level will still be eligible for premium tax credits at healthcare.gov. The recent tax bill law did not change the premium tax credit calculations now or into the future.
  • Large employers with full-time employees receiving premium tax credits need to be wary; the IRS is tracking this and sending out penalty letters.

For customized assistance with your large employer ACA strategy and Section 6056 reporting assistance, please contact our HR consulting department at 888-556-0123 or fill out our form.

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